CRM Tech Investments to Lead Corporate Spending: Jupiter

More than one quarter of all U. S. firms will spend at least $500,000 on customer relationship management technology during the next 24 months.

In addition, 23% will spend as much on content management, and 19% will make similar investments in supply chain management systems, according to a new survey by Jupiter Media Metrix.

Spending on online service contracts will rise from $9.7 billion annually to $16.5 billion between 2001 and 2006. At the same time, online channels will account for more sales of the contracts, quadrupling from 2% in 2001 to 9% in 2006, Jupiter reported.

Financial services firms will make up the single largest market for CRM technology, with the $3.1 billion they spent in 2001 increasing to $5.4 billion in 2006. One quarter of financial marketers have budgeted more than $1.5 million for CRM infrastructure spending during the next 24 months.

Following that lead, retailers will spend $3.2 billion in 2006, up from $1.7 billion last year, and telecommunications firms’ expenditures will jump from $1.9 billion to $2.9 billion.

According to the Jupiter CRM Spending Model, investments in CRM analytic software, which now total $5.2 billion, will increase to $8.7 billion by 2006 and will account for more than half of all CRM expenditures.

Nearly six in ten executives surveyed said that justifying return on investment to the rest of their corporations was the top challenge they face. More than one third were concerned about integrating the CRM software into existing applications.

“Businesses must realize that investing in CRM technology does not alone ensure that they will be able to implement the organizational changes needed to gain a competitive advantage,” said David Daniels, Jupiter senior analyst, in a statement.

Daniels continued, “To execute a CRM strategy effectively and strengthen relationships with customers, businesses must appoint a senior-level CRM guru who reports to the CEO and coordinates all CRM activities.”